New Home Sales Dive 48% Since 2008

New single-family home sales in January came in at an adjusted annual rate of 309,00, down 10.2 percent from a month earlier and 48.2 percent from the rate seen in the same month a year earlier, according to data released Thursday by the U.S. Department of Commerce. The South experienced the highest number of new home sales in the month, with 172,000 units sold, while the Northeast reported the smallest number of new home sales, with 27,000 units sold. The West saw the largest month-over-month decline in sales, which fell 28 percent to 59,000 in January, while the Midwest saw the smallest monthly decline of 5.6 percent to 51,000 units sold in January. The seasonally-adjusted estimate of inventory for sale at the end of the month came in at 342,000 — a 13.3-month supply at the current sales rate, according to the data. The real, unadjusted number of homes for sale fell 3.1 percent since December 2008 — and has been declining each month through 2008 — but the rate of sales has slowed even more. While the volume of unsold inventory has declined 29.3 percent since January 2008, the annual rate of sales each month has slipped 48.2 percent in the same time, indicating that the demand for new homes has fallen too quickly for the relief on inventory to keep up. At the annual sales rate seen in January 2008, the unsold inventory then ranked only 9.8 months’ supply and has steadily swelled since, according to the Commerce Department’s data. The average sales price for new homes in January was $234,600. A break down of new home sales by price in January illustrated the shifting demand, as well as consumers’ appetites for housing and the amount of debt they’re willing to take on as the economy forges ahead into the second year of depression. Sales edged away from the more expensive extremes of sales prices as homes continue to lose value. The number of homes sold at $750,000 and over ranked below 500 units for the second consecutive month — accounting for only 1 percent of total sales. New homes sold from $500,000 to $749,999 also fell off the radar in January, coming in at below 500 units sold — but accounting for about 2 percent of total sales, according to the data. Homes sold at under $150,000 accounted for 22 percent of total sales in January, while homes sold from $150,000 to $199,999 accounted for 27 percent of total sales and those sold at the $200,000 to $299,999 price range accounted for another 33 percent of total sales. All told, 82 percent of sales made in January 2009 occurred in the $299,999 and below price tiers, compared with 71 percent of sales in January 2008 and 64 percent of sales made in all of 2007, according to the data. Existing-home sales also tumbled in January, according to the National Association of Realtors, as buyers were likely waiting to see how details of the economic stimulus package would pan out. Existing-home sales – including single-family, town homes, condominiums and co-ops – fell 5.3 percent month-over-month to a seasonally adjusted annual rate of 4.49 million units, compared to 4.74 million units in December and 4.91 million units in January 2008. Read the Commerce Department’s report. Write to Diana Golobay at diana.golobay@housingwire.com.